American firm signs $300m Methane Gas extraction deal

NYARUGENGE - Contour Global, an American energy investment and development firm is to produce energy from Methane Gas amounting to about 100MW over the next 25 years according to agreements signed yesterday with the government. The deal, which is worth $300m was signed following months of negotiations yesterday at the Ministry of Finance headquarters and will see the gas extracted from Lake Kivu in the Western Province generated into electricity. The concession agreement signed by the Minister of Finance James Musoni and the State Minister for Energy, Eng. Albert Butare on behalf of Government and Joseph Brandt, the President of Contour Global, will see the group start on the implementation of the first phase of the project to produce 25MW by 2010. Speaking after the signing, Musoni said that the Government and the people of Rwanda are looking forward to the success of the project, which is expected to be the biggest source of energy in the country. The pilot phase of the project in Rubavu district is producing 2MW. He assured Contour Global and other partners who include the International Finance Corporation (IFC) of the World Bank and Rwanda Investment Group (RIG) among others, that the government is committed to the success of the project expected to greatly address the country’s power needs. According to Butare, activities will begin as soon as possible so that by the end of 2010, the 25MW will be channelled into the country’s energy grid while the second phase of 75MW will be online by the end of 2012. Currently, the entire country relies on 60MW generated from different energy projects. He noted that that the bigger methane project is part of the extensive programme the government is currently working on aimed at increasing the power generation capacity to meet future energy demands. Butare added that the government is currently working on a number of projects across the country, citing the newly installed Thermal Generator at Jabana that uses heavy fuel oil, as another geared towards ensuring that a considerable margin of the population has access to affordable and reliable electricity. Currently only six percent of the population access electricity but the methane gas project will see at least 16 percent of the population use electricity by 2012. The State Minister for energy added that the government is confident that an additional 100MW of electricity will enable the country reach its targets of increasing access to electricity to most households and also fuel the development of industries and the economy as a whole. The Managing Director of the public energy distribution utility Electrogaz, John Mirenge also signed the power purchase agreements with the American firm. Electrogaz manages the countries power grid and electricity distribution and will be purchasing power directly from Contour and its partners. Brandt, whose Contour Global is set to become the biggest independent power producer in Rwanda, said that methane project is no longer a ‘science experiment’ but a reality. Surveys done by the group indicate that Kivu has massive deposits of methane to sustain production for a very long time. The project will be the first of its kind worldwide. Ends

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American firm signs $300m Methane Gas extraction deal